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2012 (6) TMI 33 - AT - Income TaxIncome from House Property - assessee, owner of a house property having ground plus 4 storey building did not declared any income from the said property - assessee contending Municipal Rateable Value (MRV) to be annual value whereas Revenue determining the same to be on the basis of 8.5% returned on the investment made of the property - claim of vacancy allowance in respect of floors vacant during the year - assessee also contended that floors occupied by partnership firm and companies for carrying out business should be excluded - Held that:- In case the property is not let out at all during the previous year, no vacancy allowance can be given u/s 23(1)(c). Vacancy allowance can be given only when the property is let and vacant for part of the year. See Vivek Jain vs ACIT [2011 (1) TMI 897(HC)] - Decided against the assessee. Portion used for business purpose - Held that:- Portion of the property used by the partnership firm in which assessee is a partner has to be excluded from the total income. However, portion used by the company in which the assessee was share holder and director, cannot be considered for exclusion as company has separate and distinct identity and business being carried on by the company can not be considered as business done by share holder or director - Decided partly in favor of assessee. Fair rental value has to be determined on the basis of comparative cases in the locality and other relevant factors. The return on investment may not always be a reliable indicator of fair rent of the property which depends upon market conditions such as demand and supply position in an area. A comparative case in the locality will be the best guide for determination of fair rent. Issue regarding determination of fair ALV, restored to the file of AO.
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